Article | 1:17 min read

Don’t Miss these Tax Breaks for College Students

Life Events

The IRS has two tax breaks college students should know about, whether you’re pursuing higher education, specialized job training, or grad school.

Young woman working in home office

The American Opportunity Tax Credit and The Lifetime Learning Credit are two great opportunities to help taxpayers save money. Tax season can be stressful, and these tax breaks may be able to help take off some stress.

According to the IRS, eligible taxpayers who paid higher education costs for themselves, their spouse, or dependents in 2021 may be able to take advantage of two education tax credits.

The American Opportunity Tax Credit is:

  • A maximum benefit of up to $2,500 per eligible student
  • Students are eligible for the first four years at a post-secondary or vocational school
  • Must be pursuing a degree or other recognized education credential
  • Partially refundable. Taxpayers could get up to $1,000 back

The Lifetime Learning Credit is:

  • A maximum benefit of $2,000 per tax return, per tax return, per year, no matter how many students qualify
  • Available for all years of postsecondary education and for courses to help acquire or improve job skills
  • Available for an unlimited number of tax years

Forms

Students will need to have received a Form 1098-T, Tuition Statement from an eligible institution. To claim the credit, the student or taxpayer must fill out Form 8863, Education Credits with their tax return.

Preparing Taxes

Be sure to consult a tax advisor. Choosing the right tax preparer can be scary for new students or taxpayers, but having someone to help guide you through the tax preparation can relieve some of that stress! These tax breaks are just one way to help college students, among other ways to maximize your tax return.

The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its subsidiaries and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.